By the time Kodak made headlines for ending a 67-year-old relationship with the J. Walter Thompson advertising agency in mid-June, big changes had become almost de rigueur for the giant company.

But change was sorely needed. Among its myriad problems at the end of the 1980s, perhaps the most serious was management's complacent attitude. For example, former CEO Kay Whitmore literally rested on his laurels when he managed to fall asleep in a meeting with Bill Gates.

In "Changing Focus," Alecia Swasy documents the story of Kodak's struggle to rejuvenate itself and to recapture its position as a leader in a global market.

Founder George Eastman, who started out in 1877 by buying $94.36 worth of equipment and lenses, built up a paternalistic company that amply rewarded its employees and acted as an economic engine for Rochester, N.Y. The company eventually would churn out enough film to stretch to the moon and back, and hit annual sales of nearly $14 billion. In 1932, Eastman shot himself, leaving a note that said, "My work is done. Why wait?"

Like many other American companies, Kodak thrived in the 1950s and '60s. At the same time, it cultivated an insular view of its business, and when foreign competition, namely Fuji, encroached on its market, Kodak was caught unprepared.

In the late 1980s, when Kodak faced heavy debt and had suffered from serious mistakes made by management, change started to rock the organization--from a management ouster to a downsizing that slashed thousands of jobs.

At its peak, in 1982, writes Swasy, Kodak employed 60,200 people in Rochester. By 1993, employment was down to 36,800.

In one of the biggest changes in 1993, the board of directors requested that Whitmore resign and asked Motorola CEO George Fisher to take over. "Fisher would be leaving a hugely successful company to come to one in absolute chaos," Swasy says.

Fisher was an expensive choice. According to the author: "At the very least, Fisher would get about $25 million in salary, bonus and loans, before adding in the value of stock, options and other bonuses."

As for the controversy generated over his compensation contract, Swasy tries hard to be fair: Many people thought he was being grossly overpaid, others didn't begrudge him the money, provided he could work a miracle or two. But, instead of achieving a balance, Swasy seems to veer between lauding Fisher's efforts and harping on the huge wage gap between the top boss and the workers.

Nevertheless, Fisher did make progress. His accomplishments included revamping performance appraisals, pay and benefits, meeting tougher financial standards, addressing quality improvements and product innovations, selling non-core businesses, pursuing new technology and positioning the firm to compete on a global level.

As Swasy notes, "Fisher's approach emphasized accountability at all levels of the company, and urgency to get things done. That sounds simple enough, but at Kodak it was practically rocket science, after the years of drifting."

Integral to Swasy's work is the detailed look at what life was like for some of the workers who lost their jobs and the ramifications for their families and the community. The author tells of a Rochester lawyer who got extra cases from disgruntled Kodak employees, and an Italian sandwich shop owner who has seen lunchtime trade dwindle. She also looks at the jittery morale of the workers who kept their jobs despite the downsizing.

"Changing Focus" thoroughly chronicles Kodak's fight to stay competitive and leaves you with the feeling that its prospects for the future seem brighter. And the story of Kodak should serve as a reminder to Corporate America that if you get caught napping on the job, you could wake up to a nightmare.

Book excerpt

"The company's success fueled an arrogance that, in hindsight, is truly remarkable. Few inside were willing to believe that any on the outside could contribute to the industry. . . .

"At Kodak, this arrogance fueled the growth of a nightmarish bureaucracy so entrenched that it could have passed for a government agency."